London – The global impact of China’s real estate crisis is starting to emerge as Chinese investors cash out their overseas holdings from Mayfair to Toronto.
With no domestic remedy to address the crisis emanating from China, its unchecked spread was inevitable given Chinese real estate is a worldwide empire.
The contagion was always going to go international. And this offloading, as prices decline, will help keep markets unstable.
Chinese real estate moguls were previously guaranteed loans to turn around the crumbling industry back home.
But cold hard cash remains one of the most important commodities in the property game, as the latest Chinese crisis now weighing on investors makes clear.
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The crisis has seen property prices and sales plummet in China after years of speculative building led to a supply glut.
Chinese purchasers became major players in global real estate in the 2010s, pouring money into cities from London to Sydney.
Now some are heading for the exit as China’s woes spread. In London’s prime postcodes, Chinese investors are behind half of all property sales.
Many are taking advantage of the weak pound to offload property bought earlier when the currency was much stronger.
In Toronto, Chinese nationals were the largest foreign buyers from 2016-2018. Sales to China have since declined as Beijing tightened capital controls.
But further forced selling of overseas assets looms if the domestic picture in China continues to darken.
Global cities transformed by Chinese investment could face a glut of properties being dumped on the market.
And that prospect will unsettle investors worldwide already coping with a darkening economic outlook.
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